Question of the Day

Did illegal voters swing any congressional races?

ImClone Systems Inc. founder Sam Waksal yesterday pleaded guilty to an insider-trading scheme, becoming the highest-ranking executive to fall to a corporate scandal this year.Mr. Waksal's admission to six of 13 counts of fraud and conspiracy appeared aimed at shielding his daughter and aging father from prosecution for the same crimes, though it leaves them open to charges of lying to regulators in an effort to cover up the questionable stock sales.The guilty plea also brings nearer a day of reckoning for Mr. Waksal's friend Martha Stewart. The home-decor executive, like the Waksals, sold a large block of ImClone shares in December the day before the stock plunged on news that the government had rejected ImClone's application for its new cancer drug, Erbitux.Mr. Waksal faces up to 65 years in jail as well as further charges, as his plea was not part of a cooperation agreement with the government. Prosecutors yesterday said they will press the remaining counts and disclosed they are investigating more than $30 million in stock sales by individuals connected to Mr. Waksal."Dr. Waksal may have tipped others who sold stock," Assistant U.S. Attorney Michael Schachter told the U.S. District Court in Manhattan. "The government's investigation is continuing, and we have advised defense counsel very clearly that this investigation may result in additional charges against Dr. Waksal and others."Mr. Schachter said Mr. Waksal tried to use his family as "human shields" to avoid prosecution. But Mr. Waksal sought to deflect blame from his family by fashioning his plea to omit conspiracy charges that say his father and daughter sold the stock after receiving inside information."I have made terrible mistakes. I deeply regret what has happened. I was wrong," Mr. Waksal, 55, said at a press conference after the court hearing. He remains free on bail until his sentencing in January.While he admitted instructing his daughter Aliza and 70-year-old father to sell millions of dollars in ImClone shares, knowing they would plummet soon on the Erbitux news, he said he did not tell his family the reason for the sales."I did not disclose to Aliza the inside information," he told U.S. District Judge William Pauley. "I regret more than anything else having involved my daughter Aliza, who did nothing wrong and has suffered so much as a result of my actions."Authorities have said that on Dec. 26, Mr. Waksal learned from a source inside the Food and Drug Administration that the agency turned down the Erbitux application.The next day, Mr. Waksal's family members began selling millions of dollars worth of shares, including $2.47 million by Aliza Waksal and $8 million by Mr. Waksal's father, Jack. The FDA's rejection of Erbitux became public Dec. 28.Mr. Waksal told the court he also tried to sell nearly 80,000 of his own ImClone shares by transferring them to his daughter's brokerage account without her knowledge.He admitted in court that he conspired with his daughter and father to obstruct the Securities and Exchange Commission during its investigation. He said they "gave false and misleading testimony" to the SEC about phone calls and trades they made.Mr. Waksal also admitted to obstructing the SEC's investigation by ordering the destruction of records and e-mail sought by the agency. His plea encompasses several counts of obstructing justice, securities fraud, conspiracy and perjury.He also pleaded guilty to one charge of bank fraud for forging the name of ImClone's top lawyer on a document securing a line of credit. That charge alone carries a possible jail sentence of 30 years, although the court is expected to reduce that term.Mrs. Stewart, the chief executive of Martha Stewart Living Omnimedia Inc., is also under investigation for her sale of nearly 4,000 ImClone shares on Dec. 27. Mrs. Stewart has not been charged. She maintains she had a standing order with her broker to sell the stock when it dropped below $60.But Douglas Faneuil, the assistant to Mrs. Stewart's broker at Merrill Lynch & Co., admitted he lied to authorities about the sell order in pleading guilty to a misdemeanor this month. Mr. Faneuil is cooperating with prosecutors.Mr. Waksal, an unusually flamboyant drug-company executive with a $20 million art collection including a Picasso, counts among his friends not only Mrs. Stewart but celebrities Mick Jagger and Mariel Hemingway.He and Mrs. Stewart are both generous donors to the Democratic Party.